Tuesday, January 08, 2008

Stocks Continue To Move Lower



Today was another bad day for stocks as the dow moved lower by 238 points to close at 12,589. You'll notice in the above chart that all 3 indices have broken their most recent support levels and the dow posted its lowest close since last April.

Below is a ratio chart of the S&P vs Bonds. When the ratio line is rising it means stocks are doing better than bonds, when the ratio line is falling it means bonds are doing better than stocks.

What I find interesting about this chart is that a major trendline which was touched many times has been clearly broken. According to the chart below, Bonds should now be a better investment than stocks.

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